Top Andersen execs to be subpoenaed

January 23, 2002|By William Neikirk and Stephen J. Hedges, Washington Bureau. Tribune correspondents Bob Kemper in West Virginia and Flynn McRoberts in Houston contributed to this report.

WASHINGTON — Congressional investigators decided Tuesday to subpoena four top Andersen officials, including its chief executive, to testify before a Thursday hearing about destruction of the accounting firm's documents related to Enron Corp.'s collapse.

One of those to be subpoenaed, fired auditor David Duncan, has signaled to the House Energy and Commerce Committee that he will likely invoke his 5th Amendment constitutional rights against self-incrimination if he is called, said panel spokesman Ken Johnson.

Amid controversy over document destruction at Andersen, FBI agents entered Enron headquarters in Houston after a former Enron official said Monday that even after a federal investigation of the firm began in October, documents had been shredded. An attorney for plaintiffs in a suit against Enron officials asked a federal court to secure the documents.

The developments came as President Bush defended his administration's handling of Enron's collapse and added that he was outraged that its executives had misled so many investors, including his mother-in-law, Jenna Welch, who lost $8,096 trading Enron stock.

"I am absolutely confident that the American people know my administration has acted the right way," Bush said in Charleston, W.Va., as Congress was set to begin scrutinizing his ties to Enron, his biggest campaign contributor. When Enron's executives sought help from his Cabinet officers, Bush said, they responded: "No help here."

In his most extensive remarks yet on Enron's failure, Bush challenged anyone with proof of White House misconduct to bring it forward. "If somebody has got an accusation about some wrongdoing, just let me know," Bush said.

Besides Duncan, the other three Andersen officials on the subpoena list are chief executive Joseph Berardino, attorney Nancy Temple and risk manager Michael Odom, Johnson said. He said the subpoenas would be served on all four Wednesday. Committee Chairman Billy Tauzin (R-La.) planned to sign them Tuesday night, he added.

The hearing by the oversight and investigations subcommittee of the House Energy and Commerce Committee on Thursday will provide the first public airing of Andersen's document destruction. The firm had been under fire after it was disclosed that Enron hid millions of dollars in debt in off-the-book partnerships.

The Senate Government Affairs Committee also will meet for a hearing on Enron's bankruptcy Thursday as Congress begins to zero in on the implications of its collapse. Several hearings are scheduled in succeeding weeks.

Subpoenas prepared

Andersen fired Duncan last week for his role in the destruction of Enron-related documents at the accounting firm's Houston office. Investigators for Tauzin's panel interviewed the auditor last week and now want him to put some of that information on the public record, including a statement that Andersen shared in the blame for Enron's bankruptcy.

Duncan's lawyer, Robert Giuffra, declined to confirm whether his client would assert his constitutional rights not to testify before the panel. "He hasn't received a subpoena yet," said Giuffra. "How can he take the 5th?"

But Johnson said Duncan's attorneys "have indicated to us that he will, in all likelihood, invoke his 5th Amendment rights, but we are pursuing his appearance nonetheless. We believe that there are many questions he could answer without jeopardizing himself."

Johnson said the committee expected him to appear--and would try to hold him in contempt of Congress if he did not.

In the cases of Odom and Temple, Johnson said, "both have agreed to cooperate with the committee, but obviously they have confidentiality concerns and would welcome the protection the subpoena provides."

Temple sent an e-mail to Andersen's Houston office on Oct. 12 reminding auditors of the company's document destruction policy, a move investigators said triggered the shredding of documents. Investigators expect Odom to testify about the impact of the e-mail.

As for Berardino, Johnson said the panel subpoenaed him because it wanted the top official of the company to testify.

Andersen officials said the firm was willing to testify before the panel but had not received a subpoena.

In Houston, the drama over documents at Enron unfolded after a former Enron executive, Maureen Castaneda, said Monday that the firm began shredding documents shortly after the Securities and Exchange Commission began investigating the firm in mid-October. The shredding continued until as late as last week, she said.

More shredded papers found

At a federal court hearing Tuesday on a suit that investors and employees have filed against the company, Enron attorney Ken Marks said the firm took the initiative to call federal prosecutors about Castaneda's statements. The plaintiffs' attorney, William Lerach, brought a box of shredded documents to the hearing. Marks said a trash can of shredded documents was discovered on the 19th floor of company headquarters Tuesday.